So basically if your intending not intending on changing your car ebvery 3 years its not the best financial option i.e. total cost of purchase as your funding the higher balance of finance for a longer period of time over that of PCP

So basically if your intending not intending on changing your car ebvery 3 years its not the best financial option i.e. total cost of purchase as your funding the higher balance of finance for a longer period of time over that of PCP

I wouldn't like to say either way - I would look at the best offer for each and do the sums.

One thing that does stand as quite odd is that if you intend to change your car every three years why not go on Contract hire - this is cheaper than PCP like for like and yes you will not have "gained equity" in the car but as your paying less then you will have more cash in the bank which should be >the equity you have in the car you buy.

So basically if your intending not intending on changing your car ebvery 3 years its not the best financial option i.e. total cost of purchase as your funding the higher balance of finance for a longer period of time over that of PCP

Were't you advocating buying a car using your mortgage a few posts ago?

That's dragging it out for a ridiculously long time

Were't you advocating buying a car using your mortgage a few posts ago?

That's dragging it out for a ridiculously long time

HOLD ON! I meant hat if you take it out on your mortgage you then pay it back in the same timeframe as you would a HP. Clearly if you did let it run the whole course of your mortgage the interest charged even though lowish APR would be massive over that time.

Buying Options I see are:-

HP

Cash

Credit card

PCP

Contract hire

Also when you have the option of paying cash you mu7st consider the financing option as the net interest you gain might be equal/higher than the interest you are paying for the car in which case you take the finance.

Using mortgage/credit cards/overdraft means you have much more flexability to pay it off early or extend it.

I certainly wouldn't commit to something like a car on credit cards at the moment if you intend stoozing the outstanding balance every 6 months or so till its paid off.

I think you'll find thats the Northern Rock business strategy and look where that got them...

Perosnally, in today's credit market, I'd want some security that the available term of the credit was fixed. I'd only do the cc thing if I was offsetting it against existing cash savings so that if my next provider said no thanks I could close the deal

I certainly wouldn't commit to something like a car on credit cards at the moment if you intend stoozing the outstanding balance every 6 months or so till its paid off.

I think you'll find thats the Northern Rock business strategy and look where that got them...

Perosnally, in today's credit market, I'd want some security that the available term of the credit was fixed. I'd only do the cc thing if I was offsetting it against existing cash savings so that if my next provider said no thanks I could close the deal

Yes I am talking about stoozing.

However there is hassle & worry about not missing the close dates - also the other thing the thought of actually having no debt/only a small mortgage is very appealing especially in the current climate.

Have you heardthat some top economists have said there is an outside chance that this credit crunch could lead to acrash which would makethe 1920's slump look very mild. That took 30 years to recover - due in nmo part WW2 however I cannot see this happening but it is worrying seeing that central banks are now piling in cash to help the high street banks sooner or later the available credit is going to cease then were in big trouble. Anyone out there whos stretched over 4 times salary better watch out.

Have I heard? He says to hpc member 5383! We're ****ed, 100% guaranteed.

But we're going wildly off topic now, Lady E's gonna kick our ****

Have I heard? He says to hpc member 5383! We're ****ed, 100% guaranteed.

But we're going wildly off topic now, Lady E's gonna kick our ****

Do you mind me asking if you are such a strong believer in this and have a property have you put it up for sale or have you sold it already and are renting and turned all your equity into liquid cash??

If not then you dont 100% believe it to happen as if you did you know you may be able to buy a house in a few years time for cash and be mortgage free or have a few steps up higher on the ladder at no additional monthly cost to you.

Welshy, see here to continue: http://www.briskoda.net/forums/off-topic-chit-chat/houses-credit-all-jazz/97207/#post1120142

Im quite new to PCP's (having always bought cars for cash but also never spending more than £6k on a car its clearly much easier o save up to that level than £20k) and from what Ive seen its not really the best option to go for.

Allow me to explain - you could buy a car by extending your mortgage which should be cheaper APR than a HP (unless its a really discounted APR), or you could buy the car on 1 or number of credit cards which are at 0% on purchases then after the 0% deal expries you could then balance tfr to another card at 0% paying the tfr fee of 2.99% or even swoping it to a life of balance rate.

Could you explain as you used to sell PCP's why they are better than HP/extending mortgage (if thats available). Im very curious as I may go down this route but any advice would come in handy.

There is no ‘best way’ to but a car, new or used. I chose a PCP as it was the cheapest way to finance this car. Often PCPs attract incentives from the Manufacturer (£1,000 in this case) this coupled to a greatly reduce interest rate (hard haggling) meant it was cheaper to finance the car this way than a comparable Bank Loan or HP. I will look at buying the PCP out with a Bank Loan in the New Year, if it works out favourably.

With an HP or PCP agreement the finance Co own the motor, but you do get the rule of Halves and Thirds applying (once a third is paid off -this includes your deposit- the finance company can’t reposes the motor without a Court Order. Once you have paid off a half of it -including the deposit- you can hand the car back to the manufacturer and write off further payments). This means an HP agreement can be used like a PCP deal to a degree and if your car is in negative equity, it is a get out of Jail card. Beware however, the Finance company may not lend you money again.

Do not be confused between the terms APR and ‘Flat rate’ of interest. APRs are spawn of the Devil and are more or less useless for the ordinary guy in the street to be able to work out what he is paying. The APR on your mortgage looks very low because the longer the loan and the greater the amount, the nearer the APR figure tends toward the Flat rate figure. Small amounts borrowed over a short time make the APRs look very big, even though the flat rate is still quite low. The flat rate works like this: if I borrow £10 over 3 years at 5% flat rate, the figures are…….

5% of the amount borrowed is 50p, this is multiplied by the number of years the loan is taken over, ie 50p x 3 (years) =£1.50 interest in total ( of course you can just as easily say 5% x 3 years = 15% and 15% of £10 is £1.50). The APR sum is a massive couple of pages worth of mathematics and is meaningless to casual inspection. The rough rule of thumb is with the average car loans, the APR is ‘very roughly’ twice the Flat rate.

So the answer to buying a car on finance is to look at the bottom line. Add it all up with the salesmen calculator and see which is cheapest. You will not normally get an incentive using a PCP on a used car and if you do, you will probably be paying for it in another way.

You're supposed to not have 'any internet access' :eek:

We all thought we were safe for several days :(

Merry Xmas (just past)

You're supposed to not have 'any internet access' :eek:

We all thought we were safe for several days :(

Merry Xmas (just past)

Thaks Val, merry Chrimbo to you too. I’m back for a couple of days work, but going up North again afterwards, just before I come straight back down again and before I go up again for another job at Newcastle……………………………

Do not be confused between the terms APR and ‘Flat rate’ of interest. APRs are spawn of the Devil and are more or less useless for the ordinary guy in the street to be able to work out what he is paying. The APR on your mortgage looks very low because the longer the loan and the greater the amount, the nearer the APR figure tends toward the Flat rate figure. Small amounts borrowed over a short time make the APRs look very big, even though the flat rate is still quite low. The flat rate works like this: if I borrow £10 over 3 years at 5% flat rate, the figures are…….

5% of the amount borrowed is 50p, this is multiplied by the number of years the loan is taken over, ie 50p x 3 (years) =£1.50 interest in total ( of course you can just as easily say 5% x 3 years = 15% and 15% of £10 is £1.50). The APR sum is a massive couple of pages worth of mathematics and is meaningless to casual inspection. The rough rule of thumb is with the average car loans, the APR is ‘very roughly’ twice the Flat rate.

[vicky pollard]Oh my god! I can't believe you just said that![/vicky pollard]

An APR is a far more meaningful figure as it gives you figure to compare to other sources of finance regulated by the FSA. "Flat Rates" are tools for shiney-suited salesmen to trick unsuspecting punters into finance deals that cost more than appear.

[vicky pollard]Oh my god! I can't believe you just said that![/vicky pollard]

An APR is a far more meaningful figure as it gives you figure to compare to other sources of finance regulated by the FSA. "Flat Rates" are tools for shiney-suited salesmen to trick unsuspecting punters into finance deals that cost more than appear.

aGREE WWW.MONEYSAVINGEXPERT.CO.UK CERTAINLY STATES THAT TO COMPARE LIKE WITH LIKE apr IS THE ONLY WAY

SORRY FOR CAPS STILL HUNG OVER!!

HI Amanda , very nice review! I'm a little scared about the price you paid though , im sure it wont be kicking the *** of the price of a new Evo X (£27k ish?) so much for entry level! It looks like I'll be getting a 118d MSport , but Im waiting for a year or 2 to let someone else take the hit on depreciation first. Are there any options that you have that you think are 'must haves' , just in case?...lol! I like to change my cars every 2 or 3 years so a PCP will probably be the way I go , dont know what a BMW salesman will think of a 10 yr old (by then) bright blue Skoda with wheeltrims and a cassette player!!!

[vicky pollard]Oh my god! I can't believe you just said that![/vicky pollard]

An APR is a far more meaningful figure as it gives you figure to compare to other sources of finance regulated by the FSA. "Flat Rates" are tools for shiney-suited salesmen to trick unsuspecting punters into finance deals that cost more than appear.

aGREE WWW.MONEYSAVINGEXPERT.CO.UK CERTAINLY STATES THAT TO COMPARE LIKE WITH LIKE apr IS THE ONLY WAY

SORRY FOR CAPS STILL HUNG OVER!!

OK guys, compare the APRs of these 2 figures. Total borrowed = £1,500 total to repay = £2,300 term of loan = 4 years. I bet my house that I can work this out as a flat rate faster than you can work out the APR. Note I say ‘work out’ not use calculator or on-line resource and I can explain exactly how I did the maths and the average person will understand me every step of the way. Or how about Total borrowed =£5,000 Total to repay = £7,500 term of loan = 5 years. Again, I can work out the flat rate in my head! APR, nobody can work that out without some help, or a large piece of paper and a rather tricky spot of maths that the average punter absolutely can no understand. APR! You’re havin’ a laugh aren’t you?

Here’s an actual example of an APR that I used to show punters (see shiny suited saleswomen don’t pull the wool over punters eyes by using APRs) in order to show how pointless APRs are in the real world.

Amount borrowed = £10

Amount of interest =50p

Term of loan = 1 year

Flat rate of interest = 5% (you can work it out in your head Welshy)

APR = and I hope you are sitting down……. 61,000,000,000+ %

Yes that’s right, over 61 billion % APR (American style billion) This was an actual example of an APR using Nissans finance calculator. APRs are not linear in appearance. People are fooled by the fact that the more they borrow the lower the interest rate looks, (APRs only) they are not getting a lower rate, the APR looks lower only.

And here is another important point as to why you 2 are both wrong and I am obviously very, very annoyed by the government brainwashing the general public with this APR Bull~hit.

I look at a Skoda which costs £X and am offered an APR rate of say 7.9% on a 3.5 year finance PCP

I then look at a SEAT at a cost of £X minus a bit, and am offered a 3 year PCP with an APR of 8%. So which is the better finance rate? You could answer that easily if you were told the flat rate.

HI Amanda , very nice review! I'm a little scared about the price you paid though , im sure it wont be kicking the *** of the price of a new Evo X (£27k ish?) so much for entry level! It looks like I'll be getting a 118d MSport , but Im waiting for a year or 2 to let someone else take the hit on depreciation first. Are there any options that you have that you think are 'must haves' , just in case?...lol! I like to change my cars every 2 or 3 years so a PCP will probably be the way I go , dont know what a BMW salesman will think of a 10 yr old (by then) bright blue Skoda with wheeltrims and a cassette player!!!

Hi Dunc, I don’t think you will get a really sharp deal with a PCP on a 2-3 year old car. The manufacturers often use incentives on new cars only. I would say get the latest 118D as it is quite a bit better than the previous lower powered version.

I couldn’t live with the M suspension coz when I hit medium sized holes in the road at speed, it feels like the car had just gone down and uncovered drain!! And that’s with normal suspension. Apart from that the ride is firm but good generally I think. The Xenons are fabulous, and much better than the Octys (sorry guys) and the speaker upgrade is worth it in my book (I didn’t go all the way with the upgraded sound system, just the speakers as they have a couple of small subs under the front seats). If you go for the M version, you’ll get the truly fab Sports seats, they are the best I’ve sat in since my old Abarth 130TC.. Oh and the USB input is good as it can control my ipod and USB sticks with it and it shows ID3 tags too. Not sure if this all works with the standard radio as I specced the Pro Sat Nav (a very nice system too)

Amanda

Salesman chat

There's too much to refute there so I'll keep it short.

I'm no Carol Vorderman (I've got better legs) but I can work out the APR stuff, thank you. Salesmen using flat rates so its easier, simpler and better for customers?

:rofl::rofl::rofl:

*breathe*

:rofl::rofl::rofl:

I don't think so. You said it yourself, they look cheaper than APRs so they like to use them so customers think they're getting a better deal. More sales in the bag and more commission for shiny suits, hair gel and hookie rolexes.

PCPs are more complicated when given an APR but that's because they're the car equivalent of IO mortgage. You're not paying off as much of the capital like a HP/loan - that's why they're cheaper anyway and favour brands with good residuals - hence the number of 3 series sold being more than mondeos.

If anyone else ever reads this I would STRONGLY advise them to go away and DYOR - do your own research. The only true way or comparing deals on an item whether it be PCP, PCH, HP, unsecured personal loan or whatever is to sit down and calculate how much money you have to pay out over the length of the term. That's the cost of finance and obviously excludes things such as depreciation that might affect your buying decision. And never sign up to a deal just because it sounds good in salesman speak, work it out and get back to them.

Hi Amanda thanks for the info , do you have any idea when the 'new' engine/facelift came out in the 1 series? , just so that I can ignore the older cars when I go to look. I guess good old fashioned bank loan might be the way to go on a 3 yr old car , especially if I like it enough to keep it 4 or 5 years. The only other cars that I like at the moment are the top spec Fabia 3 TDi , or maybe the Fiat Grande Punto Sporting/Abarth , nothing else really , now you cant buy a new Fabia vRS. Ive got appox 18 months to work out what I want next , and Im that indecisive I'll probably need every second!

PS I know what you mean about hard suspension , my Evo II was very stiff , although not quite as bad as the V or VI by all acounts.

Talking of incentives , I noticed that a few BMW dealers were offering deposit contributions on the 1 and 3 series , around £1000 on the 116i ES and around £2500 on the 320d ES a few months ago , I never thought I'd live to see the day whan a BMW dealer would have to offer discounts!! I do remember road testers in 'Performance Car' and 'Fast Lane' moaning about the fact you had to buy your own stereo though....ah happy, far off days....lol

There's too much to refute there so I'll keep it short.

I'm no Carol Vorderman (I've got better legs) but I can work out the APR stuff, thank you. Salesmen using flat rates so its easier, simpler and better for customers?

:rofl::rofl::rofl:

*breathe*

:rofl::rofl::rofl:

I don't think so. You said it yourself, they look cheaper than APRs so they like to use them so customers think they're getting a better deal. More sales in the bag and more commission for shiny suits, hair gel and hookie rolexes.

PCPs are more complicated when given an APR but that's because they're the car equivalent of IO mortgage. You're not paying off as much of the capital like a HP/loan - that's why they're cheaper anyway and favour brands with good residuals - hence the number of 3 series sold being more than mondeos.

If anyone else ever reads this I would STRONGLY advise them to go away and DYOR - do your own research. The only true way or comparing deals on an item whether it be PCP, PCH, HP, unsecured personal loan or whatever is to sit down and calculate how much money you have to pay out over the length of the term. That's the cost of finance and obviously excludes things such as depreciation that might affect your buying decision. And never sign up to a deal just because it sounds good in salesman speak, work it out and get back to them.

Selling using flat rates because it looks lower????? What???? I have never heard (as a Car Saleswoman or a customer) a salesman try this one. You can work out APRs easily with a pen and paper! Really! I am well impressed, most salesmen don’t have A level Maths! Very few customers do and I am impressed that you must retain the formulae in your head. And for those of you who wonder what this formulae might look like (the nice easy APR on that is)………………..

So can we get real, APRs are not easy to understand and if you want to know how much interest things will incur use the flat rate. You easily apply this rate to any loan over any term, good luck for those of you who wish to use the simple and reliable APR method.

One thing that I do agree with however and it is something I have said on many occasions here on Brisky, you should look at the bottom line and see if a loan represents good value. Of course if you were comparing 2 or more cars from different dealers, that cost different amounts etc, then you would have to use the above formulae to see if the APRs were favourable.

I should have said that with PCPs it is very difficult to work out what is going on as the ‘Lump’ at the end continues to attract interest as the repayments are made. But the advantage with these loans are (again, as I have said many times on Brisky) the manufacturers in order to shift more metal, often put incentives towards these deals, thus making them cheaper than any other equivalent loan in the long run. Just look at the amount repayable in total to see if it’s cheaper than a Bank loan etc and remember, there is usually nothing to stop you taking a PCP, getting the benefit of the Manufacturers incentive and then buying out the PCP with a cheap Bank loan. You will still be able to haggle as normal on the rate of interest in the PCP, as well as a discount in the price of the car with the Dealer. If you buy out a PCP quickly, the dealer takes the hit of the manufactures incentive via a ‘clawback’ policy between them. Also check to see if there is small print in the PCP document that means you will incur a penalty if you buy out the loan too quickly, but you can always make a phone call to the finance company to see what it will cost to do so. I intend to look at this option in the New Year with my current car.

Any piccies of the Beemer yet , Amanda??

Keep pressing the 'Go' button on the APR Calculator and nothing happens